Folha Online by Claudio Dantas Sequeira with collaboration of Samy Adghirni, Reportagem Local, comments by NPSGlobal, 26 Feb 2009. 

Government officials are making contacts with different financial sources, in order to get funds for the Brazilian-French submarine program, still with uncertain results. But it is early to state that the project has been actually threatened by the global economic crisis. 

In order to make the so called "Submarine Development Program – PDS" agreed with France last December go beyond papers, the Brazilian Navy is trying to get around U$S 3.6 billion dollars (R$ 8.5 billions) the estimated value of one nuclear and four conventional submarines, reported Claudio Dantas Sequeira. But the financial operation, which includes a 25-year credit line, with low interest rates is being threatened due to credit scarcity and banks' caution.

The Navy decided to open up the project to several credit institutions, besides of French ones, in order to improve its chances of financing, pointed the Brazilian newspaper Folha, but none of the potential sources of funding has escaped from the current crisis.

Even so, the Brazilian Navy expects to sign a key funding agreement by September 7, when the French President Sarkozy will visit again Brazil.

In addition, some concerns have been raised about the true impact of the program on the domestic defense industry, which the Government wishes to promote, by increasing its participation and its technological level.

In fact, the project's details reveals that many sophisticated systems would be developed in France because of the lack of scale and therefore, of the economic unfeasibility of producing them in Brazil, stated Dantas Sequeira’s report.

In this sense, the Navy expects that the submarines will be built with about 17 percent of national participation, which shows that the country will be still highly dependent on foreign industry for this kind of projects.

This condition includes vessels' weaponry. Concerning it, submarines will be equipped with  advanced multifunction "Black Shark" torpedos, and SMM-39 missiles, a sort of submarine version of Exocets.

Pedro Paulo Rezende, analyst from "Janes Defence Weekly", remarked that the most sensitive component is the steam plant of the nuclear submarine. If the country doesn’t get such technology, "it will be just a back box”, stated.

Such component of the nuclear submarine is under the Brazilian-French agreement umbrella as it is not strictly a "nuclear component". In the case of nuclear components as the propulsion reactor, they will be totally in charge of the Brazilian Army, pointed Irma Arguello, from the NPSGlobal Foundation.

Also see:

"Confirmed: Agreement with France Includes the Brazilian Nuclear Submarine"

Irma Arguello, "Financial Crisis, a Challenge to Global Security".

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